Comparing Federal Student Loans and Brazos Private Student Loans

BEFORE YOU CONTINUE READING: The information in this Comparison is valid only under normal circumstances. There are special benefits being applied on Federal Direct Loans during these trying times that are not permanent but are being applied for an indefinite period of time. As well, there are proposals for federal student loan forgiveness that have a likelihood of passing, that are not reflected in this Comparison. Please click here to review information on these special programs and take them into consideration when comparing federal Direct Loan options and Brazos student loan options.

College costs can add up quickly, and many families will end up utilizing student loans to help pay for the cost of college. It's important to understand the difference between federal loans and private loans to find the best option for your situation.

What are federal loans?

Federal loans made under the Direct Loan Program are provided by the US government. There are several types of federal student loans, depending upon whether you're an undergraduate student, a graduate student or a parent.

Federal Direct Loan Consolidation Brazos Refinance Loan
Lender United States Department of Education Brazos Education Lending Corporation
What loans are eligible? Federal Loans Only Federal and Private Loans
Can I lower my interest rate? No Yes
Can I save money? No Yes, you can save money by lowering your interest rate and/or shortening the term of your loan.
Is a credit check required? No Yes
Are income sensitive or graduated repayment plans available? Yes No

What Repayment Options Are Available?

Repayment on a Brazos Refinance Loan typically begins 30 to 45 days after disbursement. Consolidation loans from the federal government are eligible for additional repayment plans, including graduated repayment plans and income sensitive repayment plans.

Direct Loan Consolidation is offered through the federal government, whereas refinance loan options are offered by private lenders such as Brazos.

If you believe you may need to take advantage of the Income Based Repayment or graduated repayment options offered by the federal government, a Direct Consolidation Loan could make sense.

Additionally, if you have federally-backed loans and are employed in a qualified “public service” position, you may be eligible for loan forgiveness programs not available with a Brazos Refinance Loan.

If you have federal loans, you can learn more about your repayment options and the Public Service Loan Forgiveness Program by visiting Federal Student Aid.1

Will I save money either way?

Not necessarily. Direct Loan consolidation of existing loans at the weighted average rate is not designed to save you money.

Direct Loan consolidation offers the ability to combine loans into one loan with one monthly payment, as well as the ability to extend the term of your loans in certain circumstances. While extending the term on your loans may result in lower monthly payments, you’ll pay more interest over the life of the loan.

Refinancing your student loans allows you to lower the interest rate on your loans, which could help you pay off your loans sooner, meaning you’ll pay less interest over the life of your loan.

Student Loan Refinance Fixed rates from


Including 0.25% Auto-Pay Discount2

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1. While refinancing government loans as well as private loans may help many borrowers, federal loans have certain benefits that can help borrowers who experience financial distress. Private loans typically don’t have the same benefits. Everyone’s situation is different, so think carefully about refinancing your government loans and talk about it with a trusted advisor.

2. Brazos Refinance Loan fixed rates from % APR to % APR (with Auto-Pay Discount). Variable rates from % APR to % APR (with Auto-Pay Discount). Interest rates on Brazos loans are capped at 9.90%. Lowest variable rate of % APR assumes current 1 month LIBOR rate of % plus a % margin minus the 0.25% Auto-Pay Discount. Not all borrowers receive the lowest rate. If approved for a Brazos loan, the fixed or variable interest rate offered will depend on your creditworthiness, the term of the loan and other factors, and will be within the ranges of rates listed above. For the Brazos variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases.